We Have Identified the Company's Business Organization
Our business is organized as a partnership
We Have Two Benefits and Two Drawbacks to This Type of Organization
Benefits
The two partners can take advantage of specialization and run the two different sides of the company. One can lead the music lesson while the other can handle the selling of instruments.
The start-up costs for this company would be low, which would be important in order to save money to buy the materials for instrument manufacturing.
Drawbacks
If one side of the company is more popular than the other, there may be confusion when splitting the profits.
Due to the two sides of the company being slightly different, there may be conflict when deciding what to focus on financially or what to focus on in advertising.
We Have Specific Examples That Demonstrate These Benefits or Drawbacks
Benefits
Since Jenane and Tad are partnering to create this business, Tad can use his business to create the instruments, and Jenane can use her business to conduct music lessons. Both businesses are already created and serving their own purpose, but the partnership of the two businesses will give a greater opportunity for profit.
Since both of the businesses are already in effect, all the companies have to do is legally join themselves and continue doing business as before.
Drawbacks
While Jenane's side of the business will be gaining more profits due to the ongoing nature of music lessons, Tad's side of the business will gain lots of money due to the high prices associated with musical instruments. When dividing profits, care should be employed lest the business owners get greedy.
Jenane will want to advertise music lesson, but Tad will want to advertise musical instruments. Both need to be advertised for profits to increase, but money should be spent to advertise the musical instruments because if the music lessons are high quality, then people will recommend them to their friends.
We Have Hypothesized Benefits and Drawbacks of Another Type of Organization
If our business were to incorporate, we would benefit from the prestige that comes from being a large company; the ability to compete with other companies on such a large scale would be wonderful. Additionally, our business would have much less liability from individuals; if individuals were unhappy with either their lessons or their instruments, Tad and Jenane would have much less risk than if they were running the business by themselves. However, we would be unhappy by the double taxation that came from incorporating; since the music industry is not terribly profitable to begin with, taxing the company's owners and the company would reduce profits drastically, and perhaps cease to allow profitability in the business. Also, as a large company, Harmonic Studios is more liable to government regulation than it would be were it a small partnership or sole proprietorship.
We Have Identified the Company's Business Organization
Our business is organized as a partnershipWe Have Two Benefits and Two Drawbacks to This Type of Organization
We Have Specific Examples That Demonstrate These Benefits or Drawbacks
We Have Hypothesized Benefits and Drawbacks of Another Type of Organization
If our business were to incorporate, we would benefit from the prestige that comes from being a large company; the ability to compete with other companies on such a large scale would be wonderful. Additionally, our business would have much less liability from individuals; if individuals were unhappy with either their lessons or their instruments, Tad and Jenane would have much less risk than if they were running the business by themselves. However, we would be unhappy by the double taxation that came from incorporating; since the music industry is not terribly profitable to begin with, taxing the company's owners and the company would reduce profits drastically, and perhaps cease to allow profitability in the business. Also, as a large company, Harmonic Studios is more liable to government regulation than it would be were it a small partnership or sole proprietorship.